Denial of benefit u/s 11 of Income Tax Act on Late Filing of Audit Report in Form 10B: Kerala HC directs Income Tax Commissioner to decide Matter [Read Order]

The Kerala High Court directed the Income Tax Commissioner to decide the matter of denial of benefit under Section 11 of Income Tax Act, 1961 on late filing of the audit report in Form 10B.

The present writ petition is filed by Knanaya Medical Mission Menathottam Hospital, impugning the order passed by the 1st respondent, Income Tax Officer denying the benefit of Section 11 of the Income Tax Act to the petitioner on the ground of delay in filing the audit report in Form 10B.

The Counsel for the petitioner, Harisankar V Menon, submitted that the petitioner has filed an application before the Commissioner of Income Tax (Exemption) as per the Circular dated 19.07.2022 issued by the Central Board of Direct Taxes (CBDT) in this respect. The delay in filing the audit report is 74 days. Till date, no order has been passed, and the petitioner is being faced with the demand of Rs.14 lakhs in pursuance of the order passed by the Income Tax Officer.

Christopher Abraham, the Counsel for the respondents, submitted that the application for condonation of delay is still pending consideration, and as there is a huge backlog of such applications, it is taking some time to pass appropriate orders.

Section 11 of Income Tax Act,1961 provides exemptions for Income earned from property held under charitable trusts / societies for the activities carried out for charitable or religious purposes subject to certain terms and conditions.

A Single Bench of Justice Dinesh Kumar Singh observed that “Considering the said submission, the present writ petition is disposed of with a direction to the 3rd respondent, the Commissioner of Income Tax to decide the application of the petitioner (Ext.P6) for condoning the delay in filing the Form 10B application on time, expeditiously. Till the decision is taken on the said application, the demand of arrears of tax in pursuance of the Ext.P7 order shall not be given effect to.”

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